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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Dave who wrote (24671)	1/22/2004 1:38:57 PM
From: Charlie Smith	Read Replies (1) \| Respond to of 60323

Just because a company "grows" its revenues and net income does not necessarily mean that it is creating shareholder value. but it sure as hell increases that odds that it is...continuously increasing net income has to go somewhere!

To: Dave who wrote (24671)	1/22/2004 9:16:14 PM
From: Ausdauer	Read Replies (1) \| Respond to of 60323

"Just because a company 'grows' its revenues and net income does not necessarily mean that it is creating shareholder value." Dave, I think we all have favorite metrics and we all invest in companies for various reasons, whether sound or not. Although market reaction to any news is unpredictable and at times illogical, the market is made up of a spectrum of investors. In the long run shareholder value is created by participating in an expanding market segment, maintaining a sound long term perspective, predicting and preparing for market expansion, and by a continual growth in gross revenues. The margins will oscillate upward and downward. If net cash is generated in the process, regardless of specific margin calculations, I equate that with adding shareholder value. Your definition may be quite different. One aspect of SNDK's business I respect is the gross revenue per employee. Over the last year over $1 million dollars of gross revenue was produced for every SanDisk employee. I expect that number to grow substantially over the next few years. Near-term margin compression doesn't rattle me should it occur. One analyst tried to corner Eli into saying that margins have peaked or maxed out and that we have entered a steady downward decline in margins. For the near term this may be true, but I think that logic is short-sighted. It is this short-term fixation that drives Eli nuts. Aus